This transcript has been automatically generated.
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Steven Beardsley
Hello out there in podcast land, you've tuned in to the Dip, where we connect global money stories to the US and the US. So the world's most important money stories.
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Steven Beardsley
I'm Steven
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Kassandra Sundt
and I'm Kassandra. I haven't been able to find Daniel yet, but Steven's join me for our weekly Q and A episode where we're going to try to answer some of your most pressing questions and respond to your comments in our feed.
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Steven Beardsley
That's right. So if you have any pressing question or comment for us, then email us at the dip at DW dot com. Or you can always leave a comment or question wherever you're listening.
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Kassandra Sundt
And we're still here at the Berlin Global Dialog, but that just means that we have plenty of experts at hand to help us dig into some of your questions and get the best answers. So let's kick it off with a comment that Gary Suzuki asked us, or he posed the comment. I'm turning it into a question. Forgive me Gary, because he wanted to know.
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Kassandra Sundt
I posted on one of our news videos. He said today, China's building more coal fired power plants than any other form of energy. They might reduce greenhouse gases as a percentage of total energy output, but not in absolute reduction data centers. I need huge amounts of energy. It needs to be 24 seven. It can't be wind or solar.
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Steven Beardsley
Yeah. We put this question to Mathis Richtmann. He was at the IMF world Bank meetings in Washington, DC, where I was a big topic. And of course, this question was a comment I should say was posted under a climate related story.
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Mathis Richtmann
First, I think let's talk about the AI build out and there's sort of from here, is this discussion going on whether this is going to hit the labor market massively and people are going to be out of jobs because I are going to take their jobs. And I think that's sort of where I see the IMF position. The managing director said today she's more optimistic that I will drive productivity than being optimistic about AI, making the world a better place.
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Mathis Richtmann
And I think she talks that about what she calls the tsunami hitting the labor market. Now, the Google position is slightly different where they're like, well, but I could provide sort of jobs in managing AI and those could be entry level jobs as well. So there's a split position here. But remember, and I think that's and they both agreed on this, that clearly the the world is an unequal place.
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Mathis Richtmann
And the AI productivity growth may make the world even more unequal. And that a lot of the world isn't connected to the internet or energy or electricity yet. So that could be a problem to go forward to your question on energy. And that, I think, relates to what the United States is doing on nuclear right now. Nuclear is set to be an important part of the AI rollout.
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Mathis Richtmann
But the United States relies heavily on imports for uranium, especially on Russia. And that just highlights sort of the interconnectedness of the world that I think we need to be taking into account when we think about these questions, to go forward.
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Steven Beardsley
All right. Many thanks for that Mathis. Kassandra. One quick point I would add to what he said is that when we look at China, we see that they're not only building these coal fired power plants, but they're also building renewable at the same time in the same kind of fevered, frenzied pace. Which means that if we look at it, we don't really know which direction things are going.
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Steven Beardsley
Right. It's going to be more sort of, you know, pollution emitting and coal fired power plants is going to be something that's more renewable. And we also know that in China, there tends to be building for the sake of building or that is for the sake of growth. So it's hard to really say what the strategy is just from watching this happen.
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Steven Beardsley
And to say all this coal fired power plant is, is even going to be used, right?
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Kassandra Sundt
This does remind me of a conversation we had with Haim Israel. He's Bank of America's global strategist and head of thematic investing. That happened on our previous episode, but a big point of discussion. There was a I. And that's something that you all have talked to us about many times and with high and what we talked about was this kind of next level computing, right?
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Kassandra Sundt
Quantum computing. And on one of our videos about, cyber security, it's crazy. 9599 wrote, once cryptography is anchored in quantum physics, it becomes fundamentally unhackable. So you can break code, but you can't break the laws of physics. Now, I haven't taken a physics class in a long time, but when I hear words like unbreak, unhackable or unbreakable, you're asking for it, right?
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Kassandra Sundt
But I did throw that to him. And here's what he had to say.
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Haim Israel
My perspective is that eventually quantum encryption, when you add quantum and blockchain together in cartography, yes, you're making the system completely unhackable. But together, the current technology that cryptography is based on, right now cannot stand in front of quantum computing, quantum computing technology. So we'll have to adjust a lot of those quant a lot of those digital assets, a lot of those blockchain technologies, everything.
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Haim Israel
In order to prepare ourselves for the world of quantum computing.
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Kassandra Sundt
Thanks to Haim Israel from Bank of America for that answer.
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Steven Beardsley
All right. Let's take a look at another question. And this came to us from at Urban String Con, who wrote Europe at Large, needs to invest more into domestic tech companies and domestic startups. So again, a short and sweet kind of comment there. Now, Kassandra, as you know, last week I spoke with the head of the European Investment Bank, Nadia Calviño.
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Kassandra Sundt
Yeah. And so this is going to be something that's going to be the top of her mind all the time.
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Steven Beardsley
Absolutely. And this is what she had to say.
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Nadia Calviño
Yes. We definitely need to invest more in European startups and scale up so that great ideas, technologies and companies that are born in the EU can grow and prosper here in Europe. And that requires integrated, large, deep capital markets so that we can, stop, be the incubator of the world and be the leader in terms of unicorns and successful scaling up companies around the world.
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Kassandra Sundt
Thanks to Nadia for that. And if again, if you want to check out the whole conversation with either Nadia or Hiam, you can find that episode in the same feed. Wherever you're listening or watching to this one.
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Steven Beardsley
You know, it's an interesting conversation that I had with Calvino, and it always what I find fascinating is this comparison between American and European capital markets, because fundamentally, they're really different. America is a massive single country with a common culture, a common language, and it has this, incredibly explosive tech scene that sort of fuels itself when it comes to investment.
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Steven Beardsley
Right here. When you look at Europe, what do you see? You see fragmented, capital markets. You see many different countries.
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Kassandra Sundt
So sometimes competing against one another to attract business.
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Steven Beardsley
That's right. Sometimes competing against one another. So is it fair to talk about this, to talk about both capital markets in the same breath? Is it so easiest to just remove regulations from from Europe and say, now you have essentially the US? I don't know if it's so simple. Yeah.
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Kassandra Sundt
Now, Steve, one of the reasons I'm so excited you're on the show this week is because you really tapped into the German auto industry, and we do have a question along those lines I'm hoping I can throw to you. Great. This one's from Argentina, who writes, after almost 15 years of Tesla model S and soon also ten years of the model three, there are really still no real alternatives.
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Kassandra Sundt
From German manufacturers to those vehicles. There were no obstacles to making a competing product. And then people wonder why the cars do not sell. Now, this is definitely another comment rather than a question situation, but Steven, it is something we hear quite a lot people pointing to the German carmakers and their struggle with electric. And the big question is always, what about Tesla?
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Steven Beardsley
I mean, in theory this is correct, right? Why couldn't Volkswagen, for example, which is at one time it was the world's largest carmaker? Why couldn't it have come out with the killer electric car and really surprised everyone? The short answer, as we know, is that they were doing so well in combustion engine vehicles that they sort of kept their eyes on that game.
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Kassandra Sundt
Right. It was a if it's not broke, let's not fix it.
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Steven Beardsley
Let's not tinker and innovate on it. And so Tesla really came along and ate their lunch. What I would dispute a little bit is that currently there are no comparable models. Now, I think, for first adopters, for those who really love the kind of geekiness of electric cars and everything with the console and everything being different. Yeah, yeah, I think they really went for Tesla.
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Steven Beardsley
They still are to some extent, but there are really comparable models now that are competing directly with Tesla. I think the challenge now for the German auto market and for German automakers is how do you then broaden this beyond the first adopters that really went for Tesla, who many of those carmakers tried to imitate in the first few years.
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Steven Beardsley
But how do you broaden it to people who aren't real adopters and really gung ho about electric? So they say, you know what, I'm going to choose this, right? Even though I'm not so crazy about electric, I think Tesla really spoke to a large amount of of the population who was excited about electric. It still does to some extent that even their cells are falling off.
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Kassandra Sundt
Yeah. And the implication in this question here is that German carmakers kind of missed the boat or maybe missed the car on innovating a decade ago or even farther back. And but now when I step back and look at the state of the German auto industry at the moment, I'm wondering, is the German auto industry missing the boat once again?
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Kassandra Sundt
Because we're seeing now serious conversations about the extension of this 2035 deadline to get rid of new, combustion engines right?
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Steven Beardsley
Yeah, this is right. This is you're talking about. This is the EU wide 2035 deadline that says that all new car sales, there must be no emissions coming out of the tailpipe. That's not net zero. That is nothing coming out of the tailpipe. And that means battery electric vehicles. And what we've seen is that Germany has now said as a government, they've agreed that they're going to push to sort of weaken this.
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Steven Beardsley
And what exactly that means, we don't know. But it means we do know that it means extending the life of the combustion engine. Part of that is because that the auto industry, parts of the auto industry say that, hey, there's these kinds of e fuels that actually they have a net zero effect, right? Nothing out of the tailpipe but have a net zero effect.
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Steven Beardsley
And they would allow us to hold on to the combustion engine while still meeting our obligation. Critics would say that technology is not proven, that you're trying to sit on the combustion engine even longer and milk this cow for as long as you can, but you're not going to innovate. And then others would say to that, everyone knows things are heading towards EVs regardless.
00:09:45:07 - 00:09:59:07
Steven Beardsley
They're going to have to move in that direction. Just look at China. That's EV land. They still want to keep selling their. All right. That's it for this week. Remember that you can always like you can subscribe or you can leave us a comment or even a question, dare I say under any of our videos.
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Kassandra Sundt
And you can also send us a good old fashioned email at the dip at dot com. But until next time you've been listening to.
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Steven Beardsley
The Dip